OPINION, P8 COMPANIES, P5 BEFORE IT GOES PRIVATE EDITORIAL And now, Congress looking at incomesupport schemes Can’t fix tax arrears without curbing taxman’s tendency for high demands INTERNATIONAL, P14 TRADE WAR RISK Vedanta core profit up as aluminium offsets copper weakness Jose Barroso says naked, ugly protectionism must be countered LUCKNOW, TUESDAY, AUGUST 7, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XI NO. 291, 24 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 37,691.89 ▲ 135.73 NIFTY: 11,387.10 ▲ 26.30 NIKKEI 225: 22,507.32 ▼ 17.86 HANG SENG: 27,819.56 ▲ 143.24 `/$: 68.89 ▼ 0.27 `/€: 79.43 ▲ 0.15 BRENT: $73.45 ▲ $0.24 GOLD: `29,491.00 ▲ `63.00 Benelli to set up manufacturing plant in Telangana ITALIAN SUPERBIKE major Benelli has entered into an MoU with the Telangana government to set up a manufacturing plant at Medichal, Pochampally, Hyderabad, reports fe Bureau in Hyderabad. George Wang, Benelli board director, said three models are expected to be rolled out by October 2018, and about six by 2019. INDIA IS HAVING second thoughts on whether to join the 16-nation Regional Comprehensive Economic Partnership (RCEP) that includes China with which it has the largest merchandise trade deficit.Amid growing domesticresistancethatpervadesnot only industry but also several keyeconomic ministries,India has set up a panel of ministers, headed by commerce and industry minister Suresh Prabhu,toseeifthemegatrade deal is in the country’s best interests. Apart from Prabhu, the panel comprises interim finance ministerPiyush Goyal, defence minister(formercommerce minister) Nirmala Sitharaman and housing and urbanaffairsministerHardeep SinghPuri,sourcestoldFE.Puri has been chosen for his earlier experience in trade diplomacy as an IFS officer. The panel will hold its first meeting onAugust 10. “Not just industry, certain ministries are also opposing RCEP,” said one of the sources. The move comes amid pressure Over-valued stocks? Check the PEG ratio OV PEG ratio 80% (+/-6%) Tariff lines to be abolished for RCEP partners, depending on their level of development; for China, it could be 74% 92% Tariff lines India is being pressured by RCEP partners to commit to scrap TRADE IMBALANCE ALREADY HIGH 20% Indian goods exports go to RCEP members 36% Indian imports are from these nations $104 billion India's goods trade deficit with RCEP partners (mainly China) in FY18 ILLUSTRATION: SHYAM Continued on Page 2 LONG-TIME PEPSICO CEO Indra Nooyi will step down as thetopexecutiveattheworld’s second-largest food and beverage company. Nooyi, who was born in India,isararityonWallStreetas awomanandaminorityleading a Fortune 100 company. She oversaw PepsiCo during a turbulenttimeintheindustrythat hasforcedfoodgiantsincluding Coca-Cola, Campbell Soup and Oreo makerMondelez International to adapt to changing tastes. All of those companies changed CEOs in the lastyear. At PepsiCo, Nooyi stressed the company’s move toward “good foryou”options,such as Baked Lay’s potato chips and Naked juices made of fruits and vegetables. Nooyi, 62, has been with PepsiCo for 24 years and held the top job for 12. BIDDING ADIEU ■ To stay on as chairman until 2019 ■ During her 12 years as CEO, Nooyi boosted sales to $63.5 billion, up 80% from when she started ■ Nooyi is the latest high- profile female CEO to step down in food biz after Mondelez’s Irene Rosenfeld and Campbell’s Denise Morrison Ramon Laguarta, who has been with the company for more than two decades, will take over as CEO in October, the company said on Monday. Nooyiwill remain as chairman until early next year. “GrowingupinIndia,Inever imagined I’d have the opportunity to lead such an extraordinary company,” Nooyi said in a preparedstatementonMonday. Nooyiisthelatesthigh-pro- Price/Earnings to Growth (PEG) ratio helps compare relative value of a stock against others and determine if the market has priced it higher in relation to its earnings ■ Personal Finance, P13 QuickPicks House panel wants ban on LoUs lifted, says RBI acted in haste A PARLIAMENTARY panel has said the Reserve Bank of India’s ban on letters of undertaking/comfort in the wake of a $2.2-billion fraud at Punjab National Bank (PNB) was a “knee-jerk” reaction and suggested that such credit instruments be restored, reports fe Bureau in New Delhi. Some PNB officials at a Mumbai branch had issued illegal LoUs/LoCs to jewellers Nirav Modi and Mehul Choksi, causing the biggest fraud in the Indian banking history and prompting the RBI to stop these instruments that were widely used in trade finance. PAGE 23 RCom to pay Ericsson India `550 crore by September-end DEBT-RIDDEN Reliance Communications on Monday said that it was looking to complete the sale of its business assets worth `25,000 crore by the end of this month and has also agreed to pay `550 crore as settlement to telecom gearmaker Ericsson by September-end, reports PTI. The Supreme Court approved on August 3 the settlement arrived at between RCom and Ericsson India over a payment dispute and asked the Anil Ambani-led company to pay the Swedish firm’s Indian arm `550 crore by September 30. PAGE 5 Britannia to mull stock split; to issue `721-cr bonus debentures BISCUIT MAKER Britannia Industries, which is celebrating 100 years of operation, on Monday said it will decide a stock-split proposition in a board meet to be held later this month, reports fe Bureau in Kolkata. The FMCG major has also decided to issue over 12 crore bonus debentures of nearly `721 crore to its shareholders. “A meeting of the board of directors to Britannia Industries will be held on August 23 at Mumbai, inter alia, to consider the sub-division of equity shares of the company of the face value of `2 each,” the company said in a stock exchange filing. PAGE 6 FE BUREAU New Delhi, August 6 JUSTICE BN SRIKRISHNA, who headed the high-level committee on data protection, on Mondaysaid itwas not possibletodefineallthesituations underwhich a state can access citizens’ data without taking their consent. Speaking at the Idea Exchange programme of the Express Group, he argued for an authority to be entrusted with analysing the circumstances under which data can be accessed. “See, that is exactly the problem. If I say the state can access it for X purpose and if tomorrow it is important forY purpose, then the state has its hands tied. Therefore, have somebody who can access it only the basis of an authority who will be able to analyse it. You cannot have anAct of Parliament every time,” Srikrishna said. He added that nobody has the upper had under the constitution. FE BUREAU New Delhi, August 6 Dazzling debut HDFC chairman Deepak Parekh with Kotak Mahindra’s Uday Kotak and others during HDFC AMC’s listing ceremony at the NSE in Mumbai on Monday. ■ P11 EXPRESS PHOTO: PRADIP DAS All rise FE BUREAU Indices at fresh record high Benchmarks hit a new high on Monday. The Sensex rose 0.36% to 37,691.89 and the Nifty 0.23% to 11,387.10 points. ■ Page 11 38,400 Sensex 11,500 37,691.89 37,600 Nifty 11,387.10 11,250 36,800 11,000 36,000 10,750 35,200 — JUSTICE SRIKRISHNA RETIRED SUPREME COURT JUDGE WHILETHE STATED policyand to a large extent the efforts of the tax administration are to reduce the mammoth tax arrears (outstanding tax demands),certainmovescouldfrustratethegoal.TheCentralBoard of Direct Taxes’ (CBDT) latest CentralActionPlan,forinstance, seeks to incentivise the CIT (Appeal), the first appellate forum, to pass ‘quality’ orders with additional credit of two units per order.Tax experts say this would undermine the CIT(A)’sabilitytoadjudicatethe dispute,as the points that help his promotion could prejudice the bodyagainst the taxpayer. Continued on Page 2 Continued on Page 2 We took a view that it is totally impossible for us to carry out this exercise in the limited time and... resources. We thought one size will not fit all and so Parliament should by law prescribe it. Continued on Page 2 Threat to plan to cut tax arrears Continued on Page 2 ‘We need a body to handle data access’ filefemaleCEOtostepdownin the food industry, following Mondelez CEO Irene Rosenfeld last year and Campbell CEO Denise Morrison earlier this year. The industry has undergone major changes in recentyears,with acquisitions, spinoffs and mergers as big companies look for ways to drive up slumping revenues. ● CBDT MOVE CITIZENS’ PRIVACY Special Feature UV INDIA'S OFFER (GOODS) THE INSOLVENCY PROCESS for Bhushan Power and Steel (BPSL) is interestingly poised withtheSupremeCourtnowset to hear Tata Steel’s appeal on August 10.This is ahead of the August 13 deadline set by the National Company Law Appellate Tribunal (NCLAT) for filing revisedandunconditionalbids. Threecompaniesareinterested in acquiring BPSL: Tata Steel, LibertyHouse and JSWSteel. To that extent, Monday’s decisionbytheNCLATgranting the bidders a one-week extension forrevised bid is a relief for Tata Steel; the company had appealed in the Supreme Court onAugust3againsttheNCLAT’s August 1 orderthat allowed the bidders to submit revised bids forthe companybyAugust 6. ASSOCIATED PRESS Purchase, New York, August 6 34,400 35,657.86 July 6, 2018 10,772.65 10,500 Aug 6, 2018 10,250 July 6, 2018 Aug 6, 2018 ● MSP PROMISE Cotton exports to be hit as it loses ground to soybean PRABHUDATTA MISHRA New Delhi, August 6 INABSOLUTETERMS,thehike in the minimum support price (MSP) of cotton for the kharif 2018 season was 2.5 times that of soybean but farmers in key states appear to have migrated to the oilseed, finding it potentially more remunerativeincasetheannounced MSP is really implemented. Onanall-Indiabasis,thearea under cotton was 4% lower at 109.8 lakh hectares as on August3comparedwithwhatitwas at the same time last year; soybeanacreage,ontheotherhand, Sowing area (lakh hectare) Aug 3, 2017 3.98 Rise/ fall (%) Cotton Aug 3, 2018 10.62 109.5 THE RUPEE on Monday skidded to its lowest in two weeks, falling by a staggering 28 paise to end at 68.88 against the dollar on frantic demand for the US currency from importers and corporates, reports PTI. Widespread concerns about the steadily growing country's trade deficit as well as short-term debt liabilities and protectionist tendencies on the global front largely weighed on the forex front. FE BUREAU New Delhi, August 6 SURYA SARATHI RAY New Delhi, August 6 Soyabean wasabout11%higherthanlast yearat 109.5 lakh hectares. Continued on Page 2 MONETISING INVESTMENTS SoftBank first-quarter profit rises 49% on Flipkart stake sale REUTERS Tokyo, August 6 JAPAN'S SOFTBANK GROUP on Monday reported a 49% rise in first-quarter operating profit,boosted bythe sale of its stake in Indian e-commerce firm Flipkart, the first public divestment by its Vision Fund. The technologyfirm,which is planning an initial public offering (IPO) for its domestic telecom unit, also said profit was bolstered bythe sale of the majorityof chip designerARM Holding’s Chinese operations to a local consortium. The sale of the stakes are early signs that SoftBank is able to monetise its investments — a key concern for investors that have seen billions of dollars pumped into tech companies around the world but little profit-taking. SoftBank’s Saudi-Arabian backedVision Fund,theworld’s largest private equity fund,has invested $27.1 billion in 29 companies at the end of June. The Vision Fund is yet to ILLUSTRATION: ROHNIT PHORE IN THE NEWS Rupee hits fresh two-week low of 68.88 from other potential RCEP members to show substantial progress in negotiations bythe endofthisyear.India,however, feels while most RCEP memberswantNewDelhitocommit more to further liberalise its goods trade, they are reluctant toofferanythingsubstantialin return in services trade, especially on unrestricted movement of skilled professionals that is of immense interest to India.As such,domestic industries — from steel to pharmaceuticals — have been criticising our various existing trade agreements with Asean, Japan and South Korea on the grounds that India’s trade deficit with these countries have only widened after these pactscameintoforceandthere waslittlefordomesticindustry to benefit from. Also, India had a record $63-billion goods trade deficit with China in 2017-18. If, on top of this, a free trade agreement with China is effected through the RCEP (of which Beijingisakeymember),cheap productswill flood the market, they have argued. The steel ministry, for instance, argues thatwithoutanyFTA,Indiahas a trade deficit (in steel) of 2 million tonnes with China and“consideringthetrend, it’s imperative that pursuant to signing of RCEP, the trade deficit will furtherwiden”. Woman, minority, trailblazer; Nooyi is leaving PepsiCo 98.99 Partners want India to further liberalise goods trade, but reluctant to ease services trade in New Delhi’s interest NCLAT allows bids to be filed by August 13 END OF AN ERA 109.79 India reviews RCEP plan, forms GoM ● BHUSHAN POWER 114.34 MOUNTING RESISTANCE complete its final close, SoftBank said on Monday.It raised over$93billionatitsfirstclose in May last year. The fund’s stakes are now worth $32.5 billion on rising values of investments such as co-working firm WeWork, SoftBank said. The Japanese joint venture betweenSoftBankandWeWork is opening locations across Japan and rising numbers of SoftBankemployeesarebasedinthe shared working spaces, chief executive Masayoshi Son said onMonday.“Weareconsidering moving all of SoftBank’s headquarters into WeWork (offices) in the nearfuture,” he said. Tofeeditsinsatiableinvesting activities SoftBank is preparingtoraisemorecashby listing its domestic telecom unit in what could be Japan’s largest ever IPO. Ahead of the listing, analystsarecloselywatchingearnings at the telecom unit,which faces a new rival in the form of e-commerce firm Rakuten with ambitions become Japan’s fourth wireless carrier. Sales at the unit grew4.6% in the quarter to June, with profit up 0.7%. Sonhaspreviouslysaidasecond Vision Fund is coming,but on Monday declined to be drawn on its timing and size. Profit for the three months through June was 715 billion yen ($6.42 billion) from 479 billion yen a year earlier, SoftBank said. It did not release a forecast for the current businessyear,sayingthereweretoo many uncertain factors.

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